Mobile Vikings wants free mobile data for users—and its sights are set on the US.

HASSELT, BELGIUM—It's unlikely, right? A startup, potentially poised to disrupt both the European and American mobile markets, is located in a small town in eastern Belgium, only a 45-minute drive from the Dutch border.

But with any luck, Mobile Vikings just may give local providers a run for their money—with the goal of bringing the price of all mobile phone use to a drastically low level.

"We want the cost for the users to become zero," said Frank Bekkers, the company's founder and CEO.

Coincidentally, the city of Hasselt is well-known in Belgium for having introduced free public transport for local residents since 1996. From his sparsely decorated office in a corporate park outside the parish of Kiewit's semi-rural two-track train station—the animated, fast-talking Belgian outlined his company's new plan to bring down the cost of mobile data.

"We say somebody has to pay the bill. Our goal is that the users have to pay for the cost of using the network," he added. "But we believe that third-parties will be happy to pay the bill of the users if they buy stuff with them."

Starting in April 2013, Mobile Vikings will roll out a daily deal-style app to encourage users to support local business across Flanders (the Flemish-speaking region of Belgium). Eventually this will expand to all of Belgium. Similar to sites like Groupon or LivingSocial, the smartphone app incentivizes users to "check in" to a given location in exchange for discounts. Once the users make a purchase through the deal on the app, they will receive "Viking Points," which can be exchanged for top-up credit to be used to buy more voice minutes, text messages, or ideally, more mobile data. Ten Viking Points yields €1 of credit.

"We see that mobile Internet is something that everybody should have," he said. "We want to make this for free in the end. If you go to a shop and you buy something with a credit card, you don't have to pay for it using the credit card. [When you buy something,] you should get a small reward, you can use your phone for free. That's the business model we're trying to prove in Belgium. We strongly believe that this is the future."

Bekkers plans to travel to California this year to meet with Silicon Valley investors. With any luck, he hopes Mobile Vikings will expand to the United States a year from now. (Another coincidence: one of Hasselt's sister cities is Google's hometown, Mountain View, California.)

"If we can build the same success [that we have now] in Belgium, we would have three million customers in the United States," he said. Bekkers explained that his 160,000 customers currently represent approximately one percent of the crowded mobile market in Belgium. In the country, there are three large firms and 40 mobile virtual network operators (MVNO), like Mobile Vikings, who buy mobile service wholesale from larger providers.

Enlarge/ Frank Bekkers, the founder and CEO of Mobile Vikings, hopes he'll have the last laugh against mobile incumbents.

Cyrus Farivar

Crossing borders

Back in 2009, the Belgian entrepreneur founded the company with just seven employees (now 53) on one simple premise: incumbent, large mobile operators charge too much for mobile data. And their customer service is terrible.

As an MVNO, Mobile Vikings contracts with the incumbent Dutch telco KPN to provide the actual mobile network infrastructure. The larger firm has a 45 percent stake in the startup.

In December 2012, Mobile Vikings expanded service to KPN's home country, the Netherlands, and has now become the first mobile provider to have free cross-border data roaming between two neighboring countries. But, that offer is scheduled to expire in mid-March 2013.

In the coming months, Mobile Vikings will have launch parties throughout the Netherlands and will be giving away a very useful Mobile Vikings-branded item for anyone gearing up for the rest of the European winter and early spring: rubber rain boots.

Having done zero marketing throughout its nearly four years of existence, the Belgian startup now has around 160,000 total customers according to its online counter featured prominently on its website. In another effort to keep costs down, its SIM cards can only be bought online, not from any shops. Its customer service is largely done through social media (Twitter and Facebook), and its customers are among the most tech-savvy—99 percent of the clientele, according to Bekkers, have smartphones.

The company's efforts seem to have worked: revenues now stand at €3 million ($4.08 million) monthly, and Mobile Vikings is looking for more funding. Bekkers said that with a new round of investment this year in Europe and the US, he hopes to raise €10 million ($13.63 million).

"We are quite proud that we have the lowest churn. We lose six percent on a yearly basis," he said, noting that most European prepaid MVNOs lose around 30 to 40 percent of their existing customer base annually.

Bekkers attributes this low rate to the savviness of his clientèle, as well as excellent customer service.

"Some people need to pay too much to be happy," he said.

Classic, Medium and Jumbo

Unlike in the United States, where most customers are on a postpaid contract (although that's starting to change), the majority of Europeans use a debit-style prepaid system. Customers add credit on an ad-hoc basis, paying only for the text messages and calls that they make. The United States is one of the few countries in the world where both parties (sending and receiving) pay for the call—in most countries, only the sending party pays.

Today, Mobile Vikings offers two basic plans. The first is a more typical European-style plan, with 2GB of mobile data and 1,000 texts, but with varying per-minute calling rates. At €15 ($20.45) per month ("Classic"), the calling rate is €0.24 ($0.32) per minute. The "Medium" plan at €25 ($34.08) per month with a calling rate of €0.20 ($0.27) per minute, and the "Jumbo" plan (€40 per month, or $54.52) sees the rate fall further: €0.14 ($0.19) per minute.

But most interestingly, the company has a second option that is entirely data-only, €12 ($16.36) per month for 2GB of data. Here customers can't send regular text messages or make voice calls—but of course they can do so using apps like Whatsapp, Skype, iMessage, and many others.

Bekkers told Ars that for now, about 20 percent of his customers choose the data-only plan. (Full disclosure: while reporting in Belgium over the last week, I became a paying Mobile Vikings customer, after having heard about the service in 2011 from Amelia Andersdotter, a Swedish Pirate Party member of the European Parliament. I happily used the Classic plan on my unlocked iPhone for the three days that I was in Belgium.)

So why wouldn't KPN, as a large telco, simply try this out on their own? Bekkers said MVNOs can be a way to target segmented portions of the market and expand their reach. Already, there are plenty of mobile brands that target grocery store shoppers in major supermarkets across Europe, like Carrefour, Aldi, and Tesco. Others, like Ay Yaldiz, target Turkish immigrants to various European countries (especially Germany), and offer attractive calling plans to Turkey and advertise in Turkish.

Admittedly, Mobile Vikings has an uphill battle.

"[Over the last six years], I have seen several MVNO business models appear and disappear," said Jessica Ekholm, a mobile industry analyst at Gartner Research.

"The most successful MVNOs have generally offered low cost-prepaid mobile services, and/or low-cost international calling for migrant workers and/or have had a strong retail presence and brand such as supermarkets. The UK supermarket Tesco for example also sell SIMs and handsets via their mobile MVNO Tesco Mobile. There have been a few data only MVNOs but none of them have reached any greater success."

Enlarge/ The Hasselt-Kiewit train station is about a five-minute walk from Mobile Vikings' office.

Cyrus Farivar

"It was difficult for me to hold my horses, but now we have the best horses"

In Mobile Vikings' case, Bekkers is fully confident. As increasing numbers of mobile phone users have smartphones and are more interested in data rather than traditional voice plans, he believes KPN can learn from what he's doing.

"If we create this then we take the risk and if things go wrong it has no impact on their total model," he said.

Some analysts agree that Mobile Vikings (and its rivals) could point to future business models for other companies.

"Yes, it can be profitable if you can scale the business and learn to live with low margins," said Chetan Sharma, an independent mobile industry analyst. "It can be quite disruptive to the market. The Netherlands has already seen the tendency to just use data (KPN offers that) and younger generation pretty much demands such plans."

Bekkers adds that eventually, we'll all live in a completely data-driven mobile world, and that large telcos are simply moving too slow.

"The end of 2014, this is the moment that the shift will happen," he noted. "When I talk to telcos, I see that in middle management, [they get it,] and some in top see it too—they will have a problem [if they don't adapt]. It was difficult for me to hold my horses, but now we have the best horses, so we can go."

Personally i rather pay the actual price of things that i actually use, when i use them, rather than pay for someone elses internet when i buy a hamburger. How about this for a business plan: everytime you buy something, the vendor sends med 2c, and then i'll mail you a new pair of socks! for free!

Companies ought not use letters from other alphabets, unless they know how they're pronounced and don't just do it because it looks cool. Møbile sounds extremely stupid in countries that has an ø, like Denmark.

There are so many things that can be "free" if only I change my habits - buy something from Mobile Vikings app, get gas points, go to a time-share condo sales presentation, get Gevalia coffee every month, etc. it just becomes more crap I have to manage. And then when rules change I have to be cognizant of it.

How about I pay for most things with money? That is what it's made for, easy mean of exchanging goods. or built-in targeted advertising. After that it gets complicated. pretty soon somebody will come out with a means of me being able to buy data in exchange for 2 chickens, or a goat.

I'm skeptical of this working in the US just on economic terms. Even with MVNO's smartphone plans below $40/month are uncommon. Typical credit card rewards rates are ~1%; and except perhaps in the short term it's unlikely merchants will agree to a higher skim off rate which means you'd need to spend ~$4k/month to get free phone service. That's a high bar to reach even looking at all spending; but since many large expenses (mortgage/rent, car payment, student loans) are unlikely to ever be eligible making it work is going to be almost impossible even for most professionals.

How about I pay for most things with money? That is what it's made for, easy mean of exchanging goods.

Everyone complaining about the advertising based model must not have read the article: You can still pay for your service and not use the check-in app for points. It's basically opt-in. Personally I think it's a great idea to have it done this way: people who literally don't want to be bothered or for other reasons don't want to participate in the advertising based service can just pay up front, and those who are on a tight budget maybe have a way of reducing their top up charges or even having free service.

And, to be honest, the way this model is set up, it doesn't sound any worse than shopping at a store with a discount program and related coupons. Plenty of discount programs/etc end up tracking you and your purchases: this one at least "pays you back" for it, in addition to hopefully getting a decent deal with whatever you're buying. When it's stuff you're already going to buy, these tend to be win/win, so long as the tracking doesn't bother you.

However, I did notice they still segregate SMS and voice calls from overall data use. That's not the future of mobile comminucations that I'm hoping for.

Actually it is. When LTS takes over(and it will) all communications will be just data packets. SMS and voice calls will be just a backwards compatible service bolted on. LTE is all packet network, while UMTS, CDMA2000 and other current generation technologies are switched networks(That is the main reason why VoLTE is not yet in production mode anywhere today).

I'll give you one thing, though. We need a standard way of sending and receiving short messages that are not tied into iMessage, Google Talk, Facebook, Skype, WhatsApp or whatever... Though XMPP could be that solution as long as XMPP to XMPP servers are open to talk.

However, I did notice they still segregate SMS and voice calls from overall data use. That's not the future of mobile comminucations that I'm hoping for.

That won't (and can't) change until the primary cell companies change their business/pricing models. As long as they bill MVNO's for these services separately from data, and (especially for texts) at an inflated rate, the MVNO's have to pass the costs on to consumers. This probably won't change until the carriers begin shutting down their legacy 2g networks.

Also, for everyone thinking that when this happens you'll see significant savings on your phone bills; don't hold your breath. Although they might shuffle around where/how you end up paying, the carriers aren't going to accept lower profit margins, still need to fund all their back office expenses, and still need to get several hundred dollars/contract/line to cover your phone subsidy; so your everything as data plans are going to end up costing about the same/line as the plans they're replacing.

Companies ought not use letters from other alphabets, unless they know how they're pronounced and don't just do it because it looks cool. Møbile sounds extremely stupid in countries that has an ø, like Denmark.

I second that! It's comparable to metal bands who use ö because it "looks German" or Nordic or whatever - Motley Crue sounds pretty tough to a Dane, but Mötley Crüe sounds more like a Swedish pastry ;-)

Companies ought not use letters from other alphabets, unless they know how they're pronounced and don't just do it because it looks cool. Møbile sounds extremely stupid in countries that has an ø, like Denmark.

'Mobile Vikings' would be »mobile vikinger« in Danish, just for the record. If you wanted to do something actually more Danish, »Vikinger på farten« ('Vikings on the run'; though not with the same negative connotations as English) might be more appropriate. Simpler solution: Just don't stick an ø in.

I've been waiting to be able to run a small tablet, much like an iPad mini or Nexus 7, with a data-only plan, and use that as my everyday phone/social device. I pretty well have my earbuds plugged in all the time, so I'd never run in to the situation where I'm holding a display against my face.

Everyone complaining about the advertising based model must not have read the article: You can still pay for your service and not use the check-in app for points. It's basically opt-in.

Yep, that has to be the reason, i didn't read the article. Or maybe i just dont believe that the phones they give out bundled with mobile subscriptions are actually free. Just like this won´t be free.

Nor is it as simple as being opt-in. I will end up paying for your subscription, even if I don´t get one myself.

Yes, it does sound like the reason, with that response. They don't "give out phones with subscriptions." It's a pre-paid (aka pay as you go, non subscription) service with SIM cards. You can reduce your next top off payment by using their app to find local sponsored deals (e.g. paid marketing by retailers) and then buying through the app to get credit. You don't have to use the app.

And I guess you could say that you end up paying for someone else's subscription... in about the same way that you end up paying for someone else's groceries when they use a coupon and you don't. Or how you pay for marketing for the stores you shop at. I'm a little confused where you're even coming from with that.

Basically it's like a referral service, where instead of pocketing all of the partner revenue from conversions, they're giving at least some of it back to customers as credit towards service. The closest analogy is really a cashback site, because it's literally the same model just executed in a different way.

The biggest issue with this is really for retailers who participate, in that this may or may not generate truly new leads (think how Bing Cashback was mostly used... rather than people actually being driven to new conversions that otherwise wouldn't have happened through Bing, most people found something they were going to buy, then went through Bing Cashback to get the money back on it). With this being both local and more targeted in terms of product selection apparently, hopefully it will avoid that pitfall and be a favorable marketing avenue for retailers. I know that personally, there are definitely places I've shopped only because I did end up with coupons for them.

Personally i rather pay the actual price of things that i actually use, when i use them, rather than pay for someone elses internet when i buy a hamburger. How about this for a business plan: everytime you buy something, the vendor sends med 2c, and then i'll mail you a new pair of socks! for free!

Amen. The scam that is the credit card industry is a horrible, horrible model to follow, particularly all the "reward" cards. I might add that one works only because of the domination of the market by a few vendors who force it on people. Your "rewards" are pad for by the fees collected from the vendors, who in turn have to collect the money from you in the end. TANSTAAFL. If the vendors can' collect the money from the users of the reward cards, then they have to collect it on the average from all their customers. The vendors are pretty much forced to participate (and in general can't even tell until after the fact whether a particular card is a reward oen with extra fees or not).

I disapprove of the whole game. I do play it, but only because that's the only game in town and I can't change that, so I might as well be on the winning side. Well, the banks are the big winners, but the customers who use the reward cards are next in line. The rest of the customers just get screwed.

I've been using MV since I moved to Belgium last year. Their customer service really is miles ahead of any other operator here, and I'm paying about 25% of the amount that many friends and colleagues are (some people just aren't willing to change).

I've never checked in or claimed points, and really the company wouldn't be considered anything special in a country with a competitive mobile environment (e.g. the UK).

So, it's basically an MVNO offering cheap prepaid services where your prepaid account is cross-linked to some purchases that you make at other places. And they also offer data-only plans.I don't want to sound too much like a curmudgeon, but is it really news-worthy? I mean, there must be literally hundreds of telcos (primary operators or MVNOs) like this, right?

Yes, it does sound like the reason, with that response. They don't "give out phones with subscriptions." It's a pre-paid (aka pay as you go, non subscription) service with SIM cards. You can reduce your next top off payment by using their app to find local sponsored deals (e.g. paid marketing by retailers) and then buying through the app to get credit. You don't have to use the app.

And I guess you could say that you end up paying for someone else's subscription... in about the same way that you end up paying for someone else's groceries when they use a coupon and you don't. Or how you pay for marketing for the stores you shop at. I'm a little confused where you're even coming from with that.

Basically it's like a referral service, where instead of pocketing all of the partner revenue from conversions, they're giving at least some of it back to customers as credit towards service. The closest analogy is really a cashback site, because it's literally the same model just executed in a different way.

The biggest issue with this is really for retailers who participate, in that this may or may not generate truly new leads (think how Bing Cashback was mostly used... rather than people actually being driven to new conversions that otherwise wouldn't have happened through Bing, most people found something they were going to buy, then went through Bing Cashback to get the money back on it). With this being both local and more targeted in terms of product selection apparently, hopefully it will avoid that pitfall and be a favorable marketing avenue for retailers. I know that personally, there are definitely places I've shopped only because I did end up with coupons for them.

No need for an essay on how vouchers work.. the whole point is I do not like hidden costs.And when the vouchers come from vendor A but can only be used at vendor B, it becomes a whole lot worse.

Amen. The scam that is the credit card industry is a horrible, horrible model to follow, particularly all the "reward" cards. I might add that one works only because of the domination of the market by a few vendors who force it on people. Your "rewards" are pad for by the fees collected from the vendors, who in turn have to collect the money from you in the end. TANSTAAFL. If the vendors can' collect the money from the users of the reward cards, then they have to collect it on the average from all their customers. The vendors are pretty much forced to participate (and in general can't even tell until after the fact whether a particular card is a reward oen with extra fees or not).

The credit card industry version is nasty, because it's the credit card companies offering their own promotions to lure customers for themselves while extorting the cost from businesses you shop at. As in, it's marketing for the credit cards, with the cost passed on without any chance to opt out.

This, on the other hand, sounds more like advertising driven by businesses with conversion tracking and conversion incentives. As in, it's marketing for the retailers themselves, and opt in for them.

Personally i rather pay the actual price of things that i actually use, when i use them, rather than pay for someone elses internet when i buy a hamburger. How about this for a business plan: everytime you buy something, the vendor sends med 2c, and then i'll mail you a new pair of socks! for free!

Amen. The scam that is the credit card industry is a horrible, horrible model to follow, particularly all the "reward" cards. I might add that one works only because of the domination of the market by a few vendors who force it on people. Your "rewards" are pad for by the fees collected from the vendors, who in turn have to collect the money from you in the end. TANSTAAFL. If the vendors can' collect the money from the users of the reward cards, then they have to collect it on the average from all their customers. The vendors are pretty much forced to participate (and in general can't even tell until after the fact whether a particular card is a reward oen with extra fees or not).

I disapprove of the whole game. I do play it, but only because that's the only game in town and I can't change that, so I might as well be on the winning side. Well, the banks are the big winners, but the customers who use the reward cards are next in line. The rest of the customers just get screwed.

Yup; at this point I figure the grocery/gas chains doing reciprocal rewards deals (buy gas get a discount on your groceries and vice versa) are as much an attempt to internalize the entire cycle as to push customer loyalty. While as a consumer I do try to push back via min/maxing buy saving up all my grocery rewards for a single jumbo purchase of non-perishables shortly before the points would begin to expire I'm certain that that behavior is priced in to the markups covering it just like they do with the people who bring enough gas cans to max out reward benefits for that purchase.

No need for an essay on how vouchers work.. the whole point is I do not like hidden costs.And when the vouchers come from vendor A but can only be used at vendor B, it becomes a whole lot worse.

Retailer A sponsers a deal on the service.Consumer B decides to "check in" and get the deal. Retailer A makes a sale to Consumer B, verifiably through the service (the question is whether Consumer B would have made the purchase anyway).Service C receives payment for the conversion. In this case, Service C passes on some of this payment as a service discount to Consumer B.

You must really hate the internet, then, because this is how all click/conversion based advertising is modeled, minus the "service discount to Consumer B" part (with the exception of partnered cashback programs--fatwallet/Bing's old program/etc).

Not to mention that I guarantee pretty much everywhere you shop has advertising and marketing costs. It's just a question of whether you're getting anything from them directly or not. (Since part of what you get from marketing is a place that actually has enough customers to stay in business for you to shop at). So you're going to get "hidden costs" whether you like it or not.

Honestly, depending on how exactly it's modeled, it tends to be about as close to win/win for everyone involved as it gets. There's better metrics and tracking than buying space on a billboard (depending on what the disclosure agreements are and how good the underlying software is you may even be getting demographic data, and also metrics from who looked at the deal but didn't take it), and so long as most of the incentive program costs for the business are actually being credited on to the service users as discounts it's going to have a high customer satisfaction rate.

Anyone not using the program is probably "paying" about as much as they are for things like the coupon the shop placed in the local coupon book and all the other forms of marketing and advertising they engage in.

Companies ought not use letters from other alphabets, unless they know how they're pronounced and don't just do it because it looks cool. Møbile sounds extremely stupid in countries that has an ø, like Denmark.

'Mobile Vikings' would be »mobile vikinger« in Danish, just for the record. If you wanted to do something actually more Danish, »Vikinger på farten« ('Vikings on the run'; though not with the same negative connotations as English) might be more appropriate. Simpler solution: Just don't stick an ø in.

This could essential change the mobile business model. However, I think the real challenge is getting enough third-parties to buy into it and figuring how much of a purchase you need to make to get a free phone.

However, I did notice they still segregate SMS and voice calls from overall data use. That's not the future of mobile comminucations that I'm hoping for.

That won't (and can't) change until the primary cell companies change their business/pricing models. As long as they bill MVNO's for these services separately from data, and (especially for texts) at an inflated rate, the MVNO's have to pass the costs on to consumers. This probably won't change until the carriers begin shutting down their legacy 2g networks.

Also, for everyone thinking that when this happens you'll see significant savings on your phone bills; don't hold your breath. Although they might shuffle around where/how you end up paying, the carriers aren't going to accept lower profit margins, still need to fund all their back office expenses, and still need to get several hundred dollars/contract/line to cover your phone subsidy; so your everything as data plans are going to end up costing about the same/line as the plans they're replacing.

Those phone subsidies are very exaggerated. Like everything else, the commercial prices for doing business and buying products is usually about 30-40% of the price they sell to consumers. Oddly this is the same price range they sell their subsidized phones at. The exception of course is the free phones, but they aren't typically very good phones and not worth a whole lot to begin with.

Everytime you send a message for $0.25 that costs the phone company maybe $0.0001 you know why they can afford to do it...

As a customer of them (paying 25eur/month), I'm mostly pleased with the way the administration works and the way they treat their customers. But everything can be done online.

Technically, they don't have the best network since they're actually using someone else's (Base) Speeds and coverage has been improving steadily in the last year. Speeds have gone up and 3G coverage has massively improved. They have their technical problems, but all in all, it's relatively painless compared to the other operators.

As to MV, I used to be a customer but switched to one of the big telco's Telenet - which surprisingly is an MVNO on the Mobistar network. Why? Mobile Vikings offers great support but I needed it a bit too much. Over the span of 2 months this summer I had difficuty making data connections, could not call, could not send SMS's, SMS's arrived 10 times, ... Together with lackluster performance made me switch. I now pay the same monthly fee (€15) for 1 GB and 10000 SMS's and 150 minutes which is sufficient for me. Too bad because I really like the company but they just weren't the best choice for me.